Manufacturing Multinational Enterprises Research Articles

Pollution Havens in South-East Asia: Examining Japanese Multinational Enterprises in the Philippines

Pollution Havens in South-East Asia: Examining Japanese Multinational Enterprises in the Philippines

Creating a greener future: the crucial role of green innovation and supply chain management in corporate sustainability.

One of the most pressing concerns today is how to improve green innovation and supply chain management for company sustainability. It has been discovered that inefficient supply chain management is a major barrier limiting eco-friendly innovation. The supply chain management process is crucial to a company's long-term viability, yet previous research barely scratched the surface of its significance. This article uses a resource-based view to investigate how integrating green innovation and organizational agility into the supply chain management process contributes to the long-term success of businesses. This study used a cross-sectional approach. Structured equation modeling was used to examine data collected through convenience sampling from 475 employees of Chinese multinational manufacturing enterprises. Green innovation helps smooth over the bumps on the road between supply chain management and sustainable business results. Green innovation and business sustainable performance also benefit from organizational agility, which was not shown to moderate this relationship. The study teaches that in today's knowledge-based economy, firms that invest in novel technologies and adopt greener strategies are better able to address sensitive issues like supply chain management and organizational agility and achieve long-term success. This research aims to provide light on the complex interconnections between supply chain management, green innovation, and the sustainable performance of businesses. The theoretical framework for the present research was validated by the occurrence of a positive association between these variables.

Nexus between GHRM and organizational competitiveness: role of green innovation and organizational learning of MNEs

AbstractThe focus of this study was to assess the mediating effect of green innovation, in the relationship between green human resources management (GHRM) and organizational competitiveness of manufacturing multinational enterprises (MNEs). The study further looked at the moderating effect of organizational learning in the relationship between GHRM on organizational competitiveness of manufacturing MNEs. The population comprises manufacturing MNEs in Ghana. Through purposive and simple random sampling techniques, 231 manufacturing MNEs were selected for the study. Data was analyzed using frequencies, percentages, mean scores, and Structural Equation Modeling (SEM), using SPSS and SMART‐PLS (Partial Least Square) software. The study concludes that green innovation partially mediates the relationship between GHRM and organizational competitiveness. It was further concluded that organizational learning positively moderates the positive relationship between GHRM and organizational competitiveness. The study recommends that manufacturing MNEs should invest and improve the level of their organizational learning as it not only strengthens the effects of GHRM on organizational competitiveness, but it also directly improves competitiveness. Further, particular attention should also pay to green innovation, as it intervenes the relationship between GHRM and organizational competitiveness.

Industry 4.0 implementation: Environmental and social sustainability in manufacturing multinational enterprises

By introducing digital technologies, Industry 4.0 may be transforming the traditional systems of the manufacturing industries, which are often blamed for high environmental degradation and social inequalities. Due to their power, size, and scope, manufacturing multinational enterprises (MNEs) are considered by other organizations as best practice references. If there is already evidence that digitalization favours environmental sustainability, social sustainability still needs to be explored. This study aims to analyze the contribution of the implementation of digital technologies in promoting environmental and social sustainability in European manufacturing MNEs using the Resource-Based View (RBV). A research model was formulated comprising five digital technologies (Artificial Intelligence, Cloud Computing, Robotics, Big Data Analytics, and Blockchain) and sustainable environmental and social practices. To test the model, the Partial Least Squares method was applied to a sample of 764 European manufacturing MNEs. The results show that European MNEs still have a low implementation of digital technologies in their business models. Digital technologies positively contribute to achieving these companies' environmental and social sustainability. However, the contributions of implementing each digital technology to environmental and social sustainability are not equal, allowing investment prioritization by manufacturing MNEs according to the strategically defined return. This study contributes to the evolution of RBV considering digital technology as a strategic resource. It focuses on assessing the contribution of five digital technologies to achieving environmental and social sustainability and demonstrates the importance of the digital transition towards greener manufacturing production in environmental and social terms. It also suggests practices managers and policymakers can implement to accelerate digitalization and achieve the United Nations Sustainable Development Goals.

Environmental Performance Feedback and Timing of Reshoring: Perspectives from the Behavioural Theory of the Firm

AbstractThe behavioural theory of the firm (BTOF) claims that firms’ performance feedback is significant for strategic decision‐making. Building upon this, we shift our focus from the widely researched topic of financial performance to sustainability performance. We theorize that firms’ environmental performance feedback (i.e. performance relative to aspirations) influences their reshoring decisions. Based on a sample of publicly traded manufacturing multinational enterprises (MNEs) from 15 developed countries, we find that firms with below‐aspiration environmental performance (BEP) are slower to engage in reshoring activity. In contrast, firms with above‐aspiration environmental performance (AEP) are quicker to engage in reshoring. Moreover, we substantiate the moderating role of financial performance feedback: positive financial performance feedback enables firms with higher BEP to engage in reshoring activity even more slowly. Nevertheless, the moderating role of positive financial performance feedback has not been confirmed in the relationship between higher AEP and the timing of reshoring.

Pursuing opportunities in distance: the determinants of overseas R&D by Chinese multinationals

This study investigates two relevant dimensions of institutional distance – knowledge and economic distance – that influence the overseas research and development (R&D) intensity of emerging market multinational enterprises. We undertake a longitudinal analysis of 121 listed Chinese manufacturing multinational enterprises for the period 2011–2016. The results reveal that the enterprises' overseas R&D is more intense in host countries with greater knowledge and economic distance. Moreover, as the strength of intellectual property rights protection in host countries grows, the positive effects of knowledge and economic distance on the enterprises' overseas R&D intensity become weaker. We also find that political ties with home country governments strengthen the positive relationship between knowledge distance and the enterprises' overseas R&D intensity, while its moderating effect on the relationship between economic distance and overseas R&D intensity is insignificant.

CSRbest practices for global multi‐tier sustainable supply chain integration ofChinese MNEs

AbstractThe interest in global multi‐tier sustainable supply chains is growing proportionally to its increase in developing countries. Developing countries are considered the new fertile territory for developing global chains for multinational enterprises (MNEs). Despite the positive outcomes derived from this global development, it also induces negative impacts in the domain of domestic firms' competition, education, welfare and infrastructure system. A way to overcome this pessimistic view has been found in corporate social responsibility (CSR) best practices. MNEs seek to involve local stakeholders in their social activities to show their commitment and generate innovations. It calls for a multi‐tier domestic involvement integrated into a global supply chain to create value. This study builds its empirical analysis exploring a range of 1547 Chinese manufacturing multinational enterprises listed in the Shanghai and Shenzhen stock exchanges between 2010 and 2018. The findings revealed that multi‐tier supply chain integration (SCI) practices positively moderate the relationship between CSR and MNE performance. In turn, it implies benefits for developing sustainable development goals, generating new job opportunities mostly in the developing countries guaranteeing wealth employment conditions. The sense of involvement and engagement towards their employees requires more development of CSR practices, which can be moderated by multi‐tier SCI, as shown in the present study.

Corporate sustainability reporting in Japanese multinational enterprises: a threat to local legitimacy or an opportunity lost for corporate sustainability practices?

PurposeThis paper aims to investigate whether Japanese manufacturing multinational enterprises (MNEs) maintain local legitimacy in their host countries through adequate informing of local stakeholders with targeted corporate sustainability (CS) reporting.Design/methodology/approachThe paper first identified specific CS activities that were considered important in four Association of Southeast Asian Nations host countries, through semi-structured interviews with 58 participants of 16 Japanese manufacturing MNEs. The degree of establishment of local legitimacy was then measured through the number of references made to these CS activities and other activities specific to the respective host countries in the CS reports of the MNEs across a five-year period.FindingsThe majority of MNEs in the sample were under-reporting items of specific interest to localhost country stakeholders potentially undermining the MNEs’ image. There were found to be differences on the topics published in CS reports compared to those mentioned in the interviews indicating potential issues with regard to internal communication between the subsidiary and headquarters offices.Originality/valueA novel approach is taken to investigate the degree of local legitimacy established by MNEs through comparing the contents of interviews held at subsidiaries with their respective CS reports. This paper highlights the importance of considering MNE subsidiaries when addressing Target 12.6 of the Sustainable Development Goal 12: responsible consumption and production.

Product lifespan: the missing link in servitization

By drawing on a business model lens, this study proposes that the competitive performance of servitization is higher for manufacturing firms selling long-lifespan products since they better develop the key elements required for transitioning towards integrated Business to Business (BtoB) solutions delivery. Additionally, the study argues that the moderation role of product lifespan is stronger in advanced stages of servitization as it reduces replacement and information costs. To test these hypotheses, this study merges a unique survey of Manufacturing Multinational Enterprises (MMNEs) and the Lifespan Database for Vehicles, Equipment and Structures (LiVES). Results show a positive moderating effect of product lifespan in the relationship between servitization and performance. Following this finding, across firms with high-intensity servitization, the firm that sells longest-lifespan products is predicted to capture most value from servitization. Overall, the present study suggests that the implementation of recurrent services during an extended product lifecycle provides an opportunity for BtoB solutions delivery and product usage optimisation. By including product lifespan in the equation, we improve understanding of why servitization is an excellent mechanism for managing long-lasting industrial relationships and explain why servitization boosts performance in some manufacturing industries but has a neutral effect on others.

Information technologies and product-service innovation: The moderating role of service R&D team structure

Drawing on the ambidexterity and organizational design theoretical lenses this article analyzes the interplay between R&D team structure, firm’s Information Technology (IT) processes deployment and innovation outcomes. The evidence presented herein upholds the importance of IT and R&D team structure for strategic decisions and to better exploiting firm’s innovation capabilities. Concretely, we argue that R&D team structure (centralized vs formalized vs autonomous) moderates the relationship between IT processes and innovation because it influences the way in which IT is utilized. Considering these facts, we focus on a specific type of innovation, Product-Service Innovation (PSI), largely underexplored despite being increasingly important in modern manufacturing companies. PSI differs from other technological innovations in that it involves continuous engagement with customers and logistics. Through estimation of a Multiple-Indicators Multiple-Causes (MIMIC) model with a unique sample of 352 Manufacturing Multinational Enterprises (MMNEs), we find that customer and logistics IT processes are positively linked to higher levels of PSI and that, as hypothesized, service R&D team structure moderates this relationship. In firms with autonomous R&D teams, customer-based IT processes lead to higher PSI levels, whereas in firms with formalized R&D teams, logistics-based IT processes is conducive to higher PSI levels. IT processes are not an input of PSI in centralized service R&D teams.

A Perceptive Interface for Intelligent Cyber Enterprises.

Large scale, complex, networked enterprises, as may be considered (trans)national energy systems, multi-national manufacturing enterprises, smart cities a.s.o. are structures that can be characterized as systems of systems (SoS) and, as such, require specific modelling paradigms and control architectures to ensure their successful running. Their main characteristic is the necessity of solving practically one-of-a-kind problems with respect to the external context and internal configuration, thus dealing with dynamically evolving flows of data and information. The paper introduces the concept of intelligent cyber-enterprise, as an integrating paradigm that uses information and knowledge dynamics, in order to model and control SoS, especially focusing on the importance of appropriately adapt external and internal perception of an enterprise through a new generation of sensorial systems—the perceptive interfaces. The authors analyze sensing and perception in relation to intelligent cyber enterprise model and propose an implementation for a perceptive system interface.

The Distribution of Sustainable Decision-Making in Multinational Manufacturing Enterprises

In order to contribute to research on implementing business sustainability, this study aims to explore the distribution of decision-making authority related to economic, environmental, and social sustainability. Sustainability objectives between different organizational levels in multinational manufacturing enterprises (MMEs) are investigated. The research is fundamentally exploratory. We conducted a multiple case study endeavor with nine participating case organizations. The study identified five different decision-making approaches to sustainability in multinational manufacturing enterprises. The findings showed that there was no consistent way of deciding upon sustainability issues. Some case organizations seemed to regard sustainability as a global concern, while others regarded it as a more local concern. In general, the economic sustainability dimension was regarded as more of a global concern, while the environmental dimension was more of a local concern, and the social dimension more of an integrated concern. The findings of this study can act as guidance for managers when implementing or improving sustainability strategies. The findings will also serve as a map to navigate and understand what should be given the strongest priority in different situations concerning decision-making relating to sustainability in manufacturing processes and networks.

The process of selecting and prioritising corporate sustainability issues: Insights for achieving the Sustainable Development Goals

The Sustainable Development Goals are a set of 17 wide ranging goals that articulates the desired outcome of sustainable development. The private sector is a key factor in achieving these goals through actions of corporate sustainability. However, there is a paucity of research regarding the application of Sustainable Development Goals at the firm level and it remains unclear how the private sector can operationalise and achieve the goals through corporate sustainability. While every Sustainable Development Goal is deemed of equal importance, it is up to individual firms to interpret and prioritise their implementation. Using a case study approach, this paper identified the specific goals considered by Japanese manufacturing multinational enterprises as a priority when establishing or significantly expanding operations in developing countries. The methodology employed allowed the retrospective analysis of corporate sustainability data through a Sustainable Development Goal lens. In-depth, semi-structured interviews were carried out with 58 respondents from 16 sample firms operating in the Philippines, Indonesia, Thailand and Vietnam. The results show the multinational enterprises in the sample focus on a particular set of Sustainable Development Goals when establishing, or significantly expanding, subsidiary operations in the Philippines, Indonesia, Thailand and Vietnam. The findings show policy makers in the host countries should ensure Sustainable Development Goals such as education and strong institutions are in place to attract multinational enterprises to their shores. Other stakeholders such as non-governmental organisations and the community were also seen to influence the prioritisation of certain goals considered by firms.

Unpacking the effect of strategic ambidexterity on performance: A cross-country comparison of MMNEs developing product-service innovation

This study tests whether strategic ambidexterity improves Product-service innovation (PSI) outcomes for manufacturing multinational enterprises (MMNEs). It also tests successful pathways to develop PSI properly by organizing exploitation and exploration activities. Data from a survey of 338 MMNEs are analysed through Structural Equations Modelling. The sample contains firms from five world regions, including emerging economies. This approach enables contrast to determine cross-country heterogeneity in PSI outcomes. The results show that, to maximise firm performance, PSI must be developed through a sequential Exploitation-Exploration pathway. Although this optimal sequence is consistent across all world regions (except Japan), noticeable contextual differences emerge in the relative importance of exploration and exploitation to firm performance. Our findings show that exploitation (i.e., cost efficiency through PSI design) and exploration (i.e., PSI R&D) capabilities are equally important in emerging economies.

Make-or-buy configurational approaches in product-service ecosystems and performance

This research examines firm boundary configurations for manufacturers' product-service offerings. We argue that the building of a product-service ecosystem through collaboration with service providers in certain types of business services can increase performance as a result of the superior knowledge-based resources coming from specialized partners. By using fuzzy set qualitative analysis on a sample of 370 multinational manufacturing enterprises (MMNEs), the results reveal that effective servitization is heterogeneous across manufacturing industries and across business service offerings. The findings indicate that most industries achieve their highest performance through collaborations with value-added service providers in two out of three of the service continuum stages (Base and Intermediate services); while keeping the development of Advanced services in-house. The results help to contextualize the best practices for implementing service business models in MMNEs by detailing which service capabilities should be retained in-house and which should be outsourced to specialized partners in various industrial contexts.

A holistic perspective on corporate sustainability from a management viewpoint: Evidence from Japanese manufacturing multinational enterprises

This study investigates what issues are considered by Japanese manufacturing multinational enterprises to be related to corporate sustainability when deciding on the location or significant expansion of their subsidiaries. Focusing on the developing countries of the Philippines, Indonesia, Thailand and Vietnam where there are significant Japanese manufacturing activities in an environmentally sensitive region, in-depth interviews were carried out with 58 representatives from 16 Japanese manufacturing multinational enterprises. Results identify that these multinational enterprises considered four main issue areas including the environment (waste material/water; air pollution; water supply; noise; green procurement), host country employment (size of workforce; above minimum wages; rights to association; women employment/empowerment; worker safety), workforce quality (experience/training; local employment) and local consumer benefits (product benefits/impact on lifestyle) as being related to corporate sustainability issues beyond purely commercial drivers. Host country regulations had a notable impact on the issues considered by the multinational enterprises, although some voluntarily moved beyond what was required albeit in a minimal way. These findings address a paucity of studies examining a holistic perspective on sustainability, with previous research on Japanese multinationals tending to adopt an anthropocentric focus. In doing so, with a greater insight into what issues are considered to be corporate sustainability from the multinational enterprises’ viewpoint, this research has important implications in informing host country governments developing their policies and regulations to ensure relevant corporate sustainability issues are included.

Multinational enterprises, service outsourcing and regional structural change

This article offers a joint analysis of two phenomena characterising most advanced economies in recent decades: the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy. The analysis focuses on a specific intersectoral demand-side channel for structural change: the forward linkage established by foreign manufacturing multinational enterprises (MNEs) with service providers through outsourcing in the UK local labour markets. Descriptive evidence shows that service outsourcing by foreign manufacturing plants is notably larger than that of their domestic counterparts. On this basic premise, we estimate the local multiplier effect that foreign manufacturing activity has on service employment. To test our hypotheses, the methodology adopts an instrumental variable approach. Our findings suggest that foreign MNEs in manufacturing can act as a catalyst for regional structural change by stimulating employment in intermediate services via demand linkages. While the composition of this effect seems to be homogeneous in terms of the knowledge content of services, differences are found once the degree of their spatial concentration is accounted for.

Uncovering the role of cross-border strategic alliances and expertise decision centralization in enhancing product-service innovation in MMNEs

Research is needed on effective servitization by multinational enterprises. This study examines whether Manufacturing Multinational Enterprises (MMNEs) can obtain better servitization outcomes by partnering with Knowledge Intensive Business Service (KIBS) firms and or by internationalizing their service function. In addition, the paper analyses the centralization of management decisions of human resources as an organizational mechanism to overcome coordination failure between product and service units. Our primary research data contain survey responses from 285 MMNEs collected in cooperation with an industry partner. Results show that cross-border strategic alliances and expertise decision centralization are critical to enhance product-service innovation.

Location decisions of inward FDI in sub-national regions of a host country: Service versus manufacturing industries

Built on the differences between services and manufacturing sectors, this study examines the general proposition that service and manufacturing multinational enterprises (MNEs) have different responsiveness to location-specific characteristics when conducting foreign direct investment (FDI), and that these differences influence their final locations in the sub-national regions of a host country. Using a full population of 1,212 and 6,199 inward FDI projects conducted by MNEs in manufacturing and services sectors, respectively, across 234 sub-national regions in Korea between 2000 and 2004, it finds that the location decisions made by service MNEs are more likely to be driven by demand-side considerations, whereas those made by manufacturing MNEs are more likely to be influenced by supply-side characteristics of sub-national regions. In addition, it shows that sub-national location decisions made by both high-tech and low-tech manufacturing MNEs consider the availability of local strategic assets within a focal region more importantly than that from its neighboring regions, suggesting the importance of intra-regional effects. Sub-national location decisions made by location-bound service MNEs exhibit the same intra-regional effects for local market potential; however, those by non-location-bound service MNEs consider the local market potential from neighboring regions more importantly than that within a focal region, suggesting the existence of inter-regional effects.

Intellectual property rights protection, ownership structure and vertically related markets

This article considers the protection of intellectual property rights (IPR) as a determinant of the mode of foreign direct investment. By analyzing wholly owned investment and equity joint venture (JV) in vertically related industries, I find that as IPR protection gets more stringent, the propensity to choose equity JV decreases. Analysis of the firm-level data set from Taiwanese multinational manufacturing enterprises in 2006 lends supports to this result. This article also finds that local welfare increases after entry of a multinational enterprise (MNE) if the local market size is not too large. In addition, after MNE’s entry, further strengthening of IPR is beneficial to the MNE but is detrimental to local welfare.